Revenues Continue to Drop in Second Quarter for Canada’s Finning
Caterpillar dealer Finning posted CDN $1.310 billion in revenue, a 22-percent decline year over year. EBITDA dropped by half from $157 million to $77 million.
Finning reported improved profitability in Canada with a 4.4-percent EBIT margin, including unavoidable costs during the shutdown caused by the Alberta wildfires. Revenues declined by 27 percent in Canada with lower new equipment sales in all sectors and the impact of the wildfires on product support volumes in the oil sands. Rental revenues also dropped 27 percent, impacted by lower rental utilization and competitive pricing in a soft market. New equipment sales also dropped 54 percent, reflecting large mining deliveries in the second quarter of 2015 and lower industry activity in Q216, primarily in the oil and gas markets.
Revenues dropped 20 percent in South America, with weak market conditions as copper prices remained suppressed. Revenues decreased 9 percent in the United Kingdom and Ireland, because of reduced activity in key markets such as coal, steel and oil & gas.
“The second quarter results demonstrated the benefit of actions taken to improve our operating performance and reduce costs in our Canadian and South American operations,” said Finning CEO and president Scott Thomson. “I am pleased with the improvement in Canada’s profitability, particularly considering the impact of the recent wildfires in Northern Alberta. In South America, we continued to execute well in a tough market in Chile, and are encouraged by the opportunities emerging in Argentina.”
Finning International is the world’s largest Caterpillar dealer. It is based in Vancouver, B.C., operates in Western Canada, Chile, Argentina, Bolivia, the United Kingdom and Ireland, and is No. 18 on the RER 100.
About the Author
Michael Roth
Editor
Michael Roth has covered the equipment rental industry full time for RER since 1989 and has served as the magazine’s editor in chief since 1994. He has nearly 30 years experience as a professional journalist. Roth has visited hundreds of rental centers and industry manufacturers, written hundreds of feature stories for RER and thousands of news stories for the magazine and its electronic newsletter RER Reports. Roth has interviewed leading executives for most of the industry’s largest rental companies and manufacturers as well as hundreds of smaller independent companies. He has visited with and reported on rental companies and manufacturers in Europe, Central America and Asia as well as Mexico, Canada and the United States. Roth was co-founder of RER Reports, the industry’s first weekly newsletter, which began as a fax newsletter in 1996, and later became an online newsletter. Roth has spoken at conventions sponsored by the American Rental Association, Associated Equipment Distributors, California Rental Association and other industry events and has spoken before industry groups in several countries. He lives and works in Los Angeles when he’s not traveling to cover industry events.